The Province-Managing-County Fiscal System Reform, Green Transformation and Development, and Biodiversity Conservation

This paper examines the impact of the province-managing-county fiscal system reform on county-level biodiversity. The study finds that the fiscal system reform significantly increases county-level biodiversity. Mechanism tests show that the reform not only reduces county-level fiscal burdens and shortens the chain through which fiscal funds circulate, thereby improving the allocative efficiency of ecological conservation funds and the effectiveness of ecological project development, but also increases fiscal autonomy and strengthens the fulfillment of environmental protection responsibilities, accelerating green agricultural production and the green transformation of industry and consequently enhancing county-level biodiversity. An examination of heterogeneous effects by avian characteristics shows that the fiscal system reform can specifically increase the diversity of migratory birds and heavier bird species. County-level heterogeneity tests indicate that these effects are more pronounced in counties with heavier agricultural production responsibilities, greater ecological awareness, and stronger administrative capacity. An examination of differences in reform content shows that introducing provincial–county tax and fiscal revenue-sharing arrangements, clarifying fiscal expenditure responsibilities, and devolving fiscal authority are more effective in increasing county-level biodiversity. This paper not only extends the academic literature on fiscal decentralization but also provides empirical evidence for biodiversity conservation.